British Airways has posted an operating loss of £94 million ($155 million) for the first quarter, a heavy fall on the £35 million profit in the equivalent period in 2008.
The carrier's revenues were down by 12.2% to £1.98 billion, although the underlying figure before exchange was down by 16.8%.
BA managed to reduce operating costs by 6.6%, including a 7.6% cut in underlying non-fuel costs. But it turned in a pre-tax loss of £148 million for the three-month period.
"Trading conditions continue to be very challenging with...no visible signs of improvement," says chief executive Willie Walsh, although traffic has stabilised.
Yields remain "volatile", he says, but the airline's financial position is "strong" with cash at £1.26 billion at the end of June.
BA's recent financing efforts through convertible bonds and bank facilities will increase liquidity to about £2 billion.